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olya-2409 [2.1K]
2 years ago
8

You are looking to invest in one of three stocks. All other things being equal, Stock A has high expected earnings growth, stock

B has only modest expected earnings growth, and stock C is expected to generate poor earnings growth. According to LaPorta's 1996 study, which stock is likely to generate the greatest alpha for you?
Business
1 answer:
WINSTONCH [101]2 years ago
7 0

Answer:

Stock C is correct answer

Explanation:

According to the investigation of LaPorta's 1996 study Stock expected to have poor earnings growth has the greatest alpha.  Unlike, the option stock A and option stock B with modest and higher earnings growth.

Corrct Answer: Stock C.

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Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier for Schultz, and the acquis
Aleksandr [31]

Answer:

$50.67 per share

Explanation:

using the discounted cash flow model, we can determine Arras's total value:

CF₀ = $7.6

CF₁ = $7.98

CF₂ = $8.379

CF₃ = $8.79795

CF₄ = $9.2378475

CF₅ = $9.699739875

CF₆ = $9.893734673

we must first find the terminal value at year 5 = $9.893734673 / (7% - 2%) = $197.874694

now we can discount the future cash flows:

firm's value = $7.98/1.07 + $8.379/1.07² + $8.79795/1.07³ + $9.2378475/1.07⁴ + $9.699739875/1.07⁵ + $197.874694/1.07⁵ = $7.458 + $7.319 + $7.182 + $7.048 + $6.916 + $141.081 = $177.004 million

the shareholders' share of the firm's value = $177.004 million - $25 million = $152.004 million

price per share = $152.004 million / 3 million shares = $50.668 ≈ $50.67 per share

7 0
3 years ago
A marketing manager has just estimated that her firm's marginal revenue will become negative if a proposed price cut is made.
Viktor [21]

Answer:

D. More Units may be sold - but total revenue will be less than it would be at the higher price

Explanation:

Marginal Revenue (MR) represents the additional revenue that can be obtained if sales of a product are increased by one unit.

MR= is change in Total Revenue/Change in Total Output Quantity

In this situation as envisaged by the Marketing Manager, a price cut will lead to an increase in revenue based on more (marginal) units of the product sold at a lower price. The challenge, however, is that this increase in income will not be enough to offset the decrease in revenue that will result as a result of the price cut.

In other words, the organisation is better off selling fewer products or units at its current price than sell more (marginal units) at a reduced price.

7 0
3 years ago
Figuring out why the number and quality of job applicants is falling at IBM and figuring out what to do about
Mama L [17]

Answer:

There could be many reasons to this, there could be many possible reasons, managers need to carefully analyse what might be the cause.

Job advertisement might not be posted in the appropriate newspapers, websites and magazines. Here IBM human resource manager needs to find the most appropriate sources to put the ads.

IBM might not getting the right candidates because the current candidates might positing some negative reviews about its working conditions, here managers need to address this issue properly but figuring out the actual root cause for this problem.

IBM might not presenting the idea of diverse workforce in their recruiting advertisement, here they need to show diverse workforce in their hiring ads.

5 0
3 years ago
A corporation​ ________. A. can use straightdash-line depreciation method for tax purposes and MACRS depreciation method financi
lara31 [8.8K]

Answer:

The correct answer is B. can use different depreciation methods for tax and financial reporting purposes.

Explanation:

Corporations are allowed to use various depreciation methods (in a straight line, double decreasing balance and the sum of the digits of the years). For fiscal purposes, using the MACRS recovery periods, the assets of the first four classes of property are depreciated using the double declining balance method.

7 0
3 years ago
Which calculation helps determine which producer has the absolute advantage? Resources used multiplied by amount produced
zalisa [80]

Answer

The calculation that helps to determine which producer has the absolute advantage is:

B. The amount produced divided by resources used

Explanation

Productivity is calculated by dividing the amount of output produced by the inputs used in its production process. The size of the output is divided by the resources used to produce the goods to determine the advantage/profit acquired in a business process.This will give the producers ultimate advantage as compared to number of time the bussiness will pay back.


7 0
3 years ago
Read 2 more answers
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